Month: December 2013

WASHINGTON — The biggest story in American real estate in 2013 hasn’t gotten the attention it deserves, so let’s shout this out: Homeowners’ net equity holdings soared $2.2 trillion from the third quarter of 2012 to the third quarter of this year, according to new data collected by the Federal Reserve.

This is a record rebound for a 12-month period. And it’s crucially important in personal financial terms for hundreds of thousands of owners who for years have been underwater on their mortgages, meaning their homes wouldn’t sell for enough to pay off the loan.

They now have options they didn’t have before: They can sell their homes and not have to bring money to the closing. They may be able to borrow against their equity to help pay for college tuition, home improvements and other purposes. They may be able to refinance their mortgages without having to use a government-aided program.

Home equity is the difference between the mortgage debt outstanding on a residence and the current market value of the home. If your house is worth $300,000 and you owe the bank $150,000 — whether from a single mortgage or multiple loans — you have $150,000 in equity. If your mortgage debt totals $350,000 on a $300,000 house, you have $50,000 in negative equity.

Equity generally grows in several ways: You lower your debt by making payments to your lender, the value of your house increases because market conditions improve, or you raise the home’s sales value by remodeling or upgrading it.

Growing home equity not only signifies widespread recovery in household personal wealth, but also provides an important boost for the ongoing economic recovery. Consumers who have a cushion of equity in their homes are more likely to spend money on goods and services than those who don’t. The latest Fed “flow of funds” calculations show that owners have now seen their equity stakes grow more than $3.2 trillion from the post-bust low point in the first quarter of 2011.

During the financial crisis of 2008-11, millions of American owners fell into negative equity positions as the sale value of their homes plummeted. With the recovery that took hold in 2012, values began to turn upward again — dramatically so in some of the hardest-hit areas where prices had fallen fastest.

A new study released by CoreLogic, an Irvine real estate and mortgage data firm, estimated that 791,000 homes moved from negative to positive equity status during the third quarter of this year alone, and more than 3 million have done so since the beginning of 2013. Though 6.4 million homeowners continue to be underwater on their mortgage debt — in 13% of all homes with a mortgage — that is down from 7.2 million (nearly 15%) as recently as the end of the second quarter of this year.

CoreLogic researchers found that among the states that experienced the most severe property devaluations during the bust and have recovered impressively, some continue to have persistent hangovers of negative equity. In Nevada, nearly a third of all homeowners are underwater, despite price gains. In Florida, nearly 29% are still in negative equity, and in Arizona it’s nearly 23%.

In California, which suffered deep equity losses in non-coastal areas from 2007 to 2010, home values have roared back in the last two years. Now the state has just a 13% negative equity rate — significantly lower than Ohio (18%), Michigan and Illinois (both 17.7%), Rhode Island (16.6%) and Maryland (15.6%).

The states with the highest rates of homeowner equity are Texas and Alaska, where 96.1% of all owners with mortgages are in positive territory; Montana (95.8%); North Dakota (95.7%); and Wyoming (95.4%).

Other findings from the CoreLogic study:

•People with higher-priced homes are somewhat more likely to have positive equity than owners of lower-cost houses. Whereas 92% of all mortgaged homes in the country valued at more than $200,000 have positive equity, just 82% of homes valued at or below $200,000 do.

•Though homeowner equity wealth has increased rapidly in the last year, 10 million homeowners still have only modest equity stakes — less than 20% — and that puts them at risk should property values tumble again.

But another bust is nowhere in sight, thanks to tougher underwriting and regulatory oversight. So whether you’re one of the recent arrivals to positive equity status, or you’ve enjoyed it all along, the new year looks encouraging.

In a handful of pricey L.A. neighborhoods, developers are creating ritzy accommodations for a prosperous few who prefer renting to owning.

By Roger Vincent| LA TIMES

Owners of an upscale apartment complex across the street from the popular Grove shopping center in Los Angeles are spending a fortune to make some of their best units even more luxurious — and more expensive to rent.

In a handful of pricey neighborhoods across the city, some apartments are beginning to resemble a cross between a $1-million home and a five-star resort. The movement is turning on its head the long-held assumption that wealthy Los Angelenos buy, not rent, their residences.

Across 3rd Street from the swanky Grove outdoor mall, for instance, landlord Aimco is sinking $15.7 million into transforming 115 units of its sprawling Palazzo apartment complex in the Fairfax district into a special enclave called the Penthouses at Palazzo.

The upgraded apartments have touches found in expensive homes such as premium hardwood flooring, high-end appliances and shower stalls big enough for two with side-by-side rain shower heads. Monthly rents clock in at nearly $5,000 for a one-bedroom unit and more than $7,600 for a spacious three-bedroom pad.

Residents share an exclusive rooftop social deck with cabanas and have access to a new gym and a spa that sells massages, facials and other beauty treatments typically offered at chic resorts.

Such over-the-top apartments are a small but growing niche in Los Angeles. As recently as five years ago, developers calculated that rents could only go so high before affluent people would opt out and go buy a house instead, real estate broker Mauricio Umansky said. His firm, the Agency, markets the Penthouses at Palazzo.

“Back in the day, you expected a prefab shower and bathtub,” Umansky said. “Otherwise you owned something.”

Aimco is tapping a trend among L.A.-area developers to create ritzy accommodations for a prosperous few who happen to prefer renting to owning. Others testing the top end of ultra-deluxe apartments include shopping center magnate Rick Caruso and CIM Group, one of Los Angeles County’s largest retail and residential landlords.

Demand for top-drawer rentals is limited but growing, said Shaul Kuba, a principal at CIM Group.

“For the most part, people are looking for affordability when they rent,” he said, “but there are some people who are interested in experiencing that type of living without a long-term commitment.”

That type of living may include such touches as the maple cabinets, Sub-Zero brand refrigerators and six-burner Wolf stoves CIM installed in its Catania apartments at the edge of Old Pasadena, where rents hit $8,000 a month. Luxury takes many forms, Kuba said.

“It’s the concierge, the full-time security,” he said. “And it’s not having to park in a ‘compact’ space in a giant parking lot. It’s all the things you can think of.”

CIM is planning more ultra-lux apartments in Hollywood, West Hollywood and downtown Los Angeles, all neighborhoods that have shopping, dining and other attractions within walking distance.

Developer Caruso, who has regretted that he left apartments out of the mix when he built the Grove shopping center in 2002, decided to make housing a big part of his next mall. The Americana at Brand, completed in 2008 in downtown Glendale, included hundreds of apartments and condos rising over shops and restaurants.

The 242 upscale rental units have been consistently occupied, Caruso said, so he decided to dial up the deluxe in the Marc Building, the mall’s most central apartment structure. Caruso plans to upgrade the 96-unit complex when apartments turn over. Improvements may include Wolf appliances, marble surfaces and other fancy touches.

“We’re taking them up two or three notches,” he said.

Super-deluxe apartments have a colorful history in Los Angeles. Wealthy movie stars were among the tenants of elite residential buildings erected before World War II such as the El Royale and Ravenswood in Larchmont and the Talmadge and Los Altos on Wilshire Boulevard.

But Caruso may have fueled the recent flurry of new construction with his posh 8500 Burton Way tower completed barely a year ago near the Beverly Center in Los Angeles. Top rents in the market when the project was planned were about $3.90 a square foot, and Caruso planned to charge $3.50 a square foot per month or more if he could get it.

“Before we even finished we saw huge demand on our waiting list and started moving up rents,” Caruso said. “We hit the $5 mark and that seemed to be no barrier at all.”

Caruso kept raising rents and recently signed a lease approaching $9 a square foot, he said. Rents for units in the oval-shaped, eight-story building commonly top $10,000 per month. Among the amenities are a car and driver to ferry tenants around. There is a sit-down restaurant and a Trader Joe’s store on the first floor.

Caruso is planning another apartment development in Los Angeles similar in scope to 8500 Burton Way, he said.

About half of his Burton Way renters have other addresses outside the city or even outside the country, he said, often using their apartments as an alternative to staying in a hotel. Full-time residents include doctors who work at nearby Cedars-Sinai Medical Center, bankers and entertainment executives.

Other categories of tenants in L.A.’s most expensive apartments include empty-nesters who no longer want the responsibility of taking care of a house and people who have homes outside the city who want a pied-a-terre.

Residents in upscale units like the Penthouses at Palazzo also tend to be single, broker Umansky said.

“They might be going through a change in life such as a divorce; making money or losing money, but they want to rent something really nice.”

Architectural design and top-notch appointments are crucial, he said, but so are locations in the midst of shopping and entertainment.

“This is all about an urban lifestyle,” Umansky said. “You won’t see luxury apartments up on Mulholland Drive.”

When buying a new home, you want to make sure you’re getting the best deal you possibly can. One way to do that is by submitting an offer that the seller just can’t refuse. Here are a few tips that will help you submit a winning offer.

1. You want to have all your ducks in a row before you begin your search. Have a lender on speed dial. The very first thing you’ll need to do is to get a pre-approval from your bank or chosen mortgage company. This lets the seller know you are serious and that you’re financially able to buy their home. A pre-approval will most definitely give you the edge over another buyer that may not be qualified to buy.

2. It’s extremely important that you know the market area. That’s the only way you’ll know if the property is fairly priced and what you should offer. One thing to be aware of though, is that sometimes a home may intentionally be priced lower than the current market value in order to attract multiple offers. In this case, you may want to bid over the asking price if you’re really interested in the property.

3. Putting down a large earnest money deposit with a reputable escrow company will make a huge impact on the seller’s decision and will definitely strengthen your offer and your negotiating power.A good strategy when writing a winning proposal is a willingness to put down a substantial deposit with your offer. A reasonable deposit will be about 3 percent of the value of the property. A seller usually takes such an offer seriously, and will feel confident that you are committed to stand by this offer. This could give your offer a winning edge. Submitting a pre-approval letter with the offer puts your bid ahead of the others by showing the seller that your offer is backed with serious intent.

4. Find out what’s motivating the seller to move. Does the seller need to move quickly, If so, then include in the contract an end of the month or sooner closing date. It may also help to eliminate as many contingencies as possible. The more convenient you make things for the seller, the more likely you are to have your offer accepted.

5. Write a personal letter to the seller letting them know all the things you love about their house and why you feel you’d be the best person to buy their home. Most seller’s have an emotional attachment to their home and want to sell it to someone who will love it and care for it as much as they do.

6. Put a quick response deadline on your offer. If your offer is strong, you’ll want the seller to accept it as soon as possible. This will help to eliminate another buyer submitting an offer that could potentially compete with yours. Talk to your realtor about the best timeframe for your offer deadline. The Fast Kill The Slow. A buyer will be in the best negotiating position in a competitive situation if they are be the first buyer to submit a reasonable offer the seller can work with. It should compel a response from the seller before the seller receives any other offers. Acting fast and strong in a competitive situation gives a buyer the best chance to beat out other buyers.

7. ALL Cash Offer

8. Strengthen Other Elements of The Offer. While a seller’s decision often comes down to the net sales price (what the seller will walk away with), there are other elements of an offer which buyers and agents sometimes forget – elements which can sway a seller off of accepting the offer which nets the most. These include:

Size of the down payment: The larger the better.

Size of the earnest money deposit: The larger the better.

The seller subsidy: Sometimes referred to as Buyer Closing Cost Credit. Eliminate this if at all possible.

Settlement date: Either as quickly as possible as noted above, or a date of the seller’s choosing in the event the seller needs, or wants, to stay in the property longer, or even past the settlement date. Flexibility on the part of the buyer can prove to be a real incentive for a seller to accept this offer over others. A good agent will always communicate with the seller’s agent to gather this info on seller preferences.

A strong lender letter. This is a letter written by the buyer’s lender of choice indicating the buyer’s ability to obtain the financing indicated in the contract. The stronger this letter is written, the stronger the buyer’s offer looks to the seller.

A CASH offer. Any offer indicating the buyer will be purchasing ALL CASH, with no financing, will require a statement proving proof of the funds necessary to close the transaction. Without this proof, the cash offer is worthless. With this proof, the offer is “golden!” CASH is king!

9. If you have the cash as a buyer, offer to pay for some, or all, of the seller’s closing costs. This is the reverse of asking the seller to pay for some of the buyer’s closing costs. This can reduce issues of increasing the price to net the seller more and possibly avoids appraisal issues by NOT raising the sale price.

If you would like more information about submitting a winning offer, contact your realtor to request a consultation. Your realtor would be happy to assist you in any way he can.

After you’ve decided to sell your home, you want to get it sold and sold quickly. But exactly how do you go about selling your home quickly and for top dollar? Well, there are several things you must do if you want your home to sell quickly.

1. Find a sellers agent you’re comfortable with and trust. Then you must do exactly what your agent tells you to do. A seller’s stubbornness on certain key issues can delay the sales process and could cost you thousands of dollars in profit. You have to trust that your agent’s experience and know how will get the job done and that he’s doing everything in your best interest. Remember, your agent doesn’t get paid until your home sells; therefore, he’s as motivated as you are to get your home sold.

2. You must keep the price of your home in line with the current market. Otherwise, your listing will become stale and buyers will begin to think there’s something wrong with your home and this may keep you from getting top dollar. Another great strategic marketing method is to price your home below market value to attract multiple offers and in essence create a bidding war. Many times you’ll get an above market offer because each buyer will try to outbid the other.

3. Don’t skimp on your online marketing. Most buyers will begin their home search online before they even contact a Realtor for the first time. That means you’ll need lots of top quality photos, an attention grabbing headline and a description that stands out from the same old type of descriptions everyone else is using to describe their homes. If you don’t have all of the above, the buyer will skip your ad and move on to one that’s more appealing.

4. Remodeling and upgrading doesn’t always help you sell your home. If your upgrades are going to drive up the price you must get for your home in order to break even, then you may have just priced yourself out of the market. Remember, buyers generally aren’t going to pay more than the current value of the other homes in the neighborhood. Therefore, you have just wasted your time and money on an investment that will not give you a good return value. That doesn’t mean that some upgrades won’t help sell your home, because if you choose the right upgrades they will. Talk to your Realtor about which upgrades would benefit your home and which ones won’t.

5. Take Professional Photos of you home, the photos make a huge difference. Just check out the above photo, this is one of our listings that sold for more than $6,000,000, with the help of that amazing picture we were able to attract buyers to see what this home is all about.

6. Have your home staged, de-cluttered, and thoroughly cleaned. This will make a HUGE difference when a potential buyers comes to see your house. Just imagine a buyer coming in and seeing children’s toys everywhere or dog hair all over the floors, how can they envision their lives in your home when your life and clutter is still there. Try to make the home as clean and simple as possible, allowing the visitor to envision themselves in your home.

There are many different tips and tricks you could use to help sell your home quickly. Contact your Realtor for a complimentary assessment of your home and a list of market comparables in your area.

The regional median home price, $385,000, has been about the same since June after a rapid run-up earlier in the year. But prices are expected to start rising again next year.

By Andrew KhouriDecember 17, 2013

Southern California home sales plunged in November as prices stayed flat, continuing a cooling trend that started this summer.

But experts expect a jolt in prices soon.

Home prices “will start rising again in the spring, because that’s when demand heats up,” said Christopher Thornberg, founding partner at Beacon Economics.

The regional median home price, $385,000 in November, has stayed essentially the same since June after a rapid run-up in prices in the first half of this year, according to San Diego research firm DataQuick. Most economists expect prices to rise again next year, though at a slower pace. Mortgage rates are also expected to rise next year, especially if the Federal Reserve pulls back on its stimulus program.

Both trends could add up to higher costs for home buyers, who already have been priced out of many local markets. Higher interest rates could temper prices slightly, but aren’t likely to curtail demand much, said Leslie Appleton-Young, chief economist for the California Assn. of Realtors.

“People are kind of used to it and expecting it,” she said.

A recent string of positive national economic data has also boosted optimism that the housing market will move toward a more sustainable recovery. Many economists now forecast that the nation’s economic growth rate will rise to 3% in 2014, compared with a 2% average annual pace for the last 41/2 years.

“A stronger economy equals more jobs, which equals more household formation, which equals more potential home buyers,” Appleton-Young said.

For now, the housing market is muddling through the traditionally slower fall season. Many buyers put off their home search around the holidays.

November prices remained essentially flat for the fifth straight month, inching up just 0.3% from October, DataQuick said Monday. But the median is still 19.9% higher than last year because of rapid price gains last winter and spring, driven by low supply and high demand, particularly from investors.

The current slowdown has been partly seasonal. Buyers scooped up 17,283 new and resale condos and houses in November, down 14.2% from October. But sales were also 10.4% below November 2012.

Sales were 19.8% below average for November, DataQuick said.

Sales were held back by waning investor demand and a continuing shortage of homes for sale, particularly at the lower end of the market. The partial government shutdown in October may have also hurt November real estate closings, the research firm said.

Absentee buyers — mostly investors as well as some second-home buyers — purchased 26.1% of Southland homes last month, down from 27.1% in October and 28.7% in November 2012. Higher prices have made those investments less attractive. The declining availability of distressed properties has also given investors fewer options.

Foreclosed-on homes constituted 6.3% of resales in November, down from 15.4% last year, DataQuick said. Short sales — or sales for less than the amount owed on the home — also declined.

Even if prices start to rise again next spring, the market will be more tame than last spring, with fewer cash buyers and bidding wars, economists said.

“It will be a calmer experience for buyers, but of course a more expensive one,” said Jed Kolko, chief economist with real estate firm Trulia.

The California Assn. of Realtors forecasts that the number of listings will expand next year. An increasing number of owners will list homes for sale because they no longer owe more on their mortgages than their homes are worth, the trade group said.

The increasing supply is one reason that the group expects the statewide median price, based on its data, to rise 6% next year, compared with 28% in 2013.

“It’s going to be a slower price appreciation,” Thornberg said. “That is a good thing.”

Homebuyers trying to stand out from a crowd of offers in today’s competitive market are often told to write a personal letter to accompany their offer. Buyers who are financing a home, or have a smaller down payment, often have trouble competing with all-cash buyers. Appealing to the seller as a person, as opposed to a contract, can sometimes give a buyer an emotional edge.

What isn’t often explained to buyers is how exactly to write that letter. The best ideas are often squandered by poor execution. Here is a quick guide to framing the home buyer letter and leveraging your best attributes by thinking from the seller’s point of view:

1) Flatter First
This is an emotional pitch. You’re attempting to tell the seller, “I’m such a good person that you should ignore the numbers.” They need to like you. Tell the seller how great their taste in color is, how much you’d love to have their lifestyle, and what an amazing neon bottle cap exhibit they have over the fireplace. Lay it on thick, but keep it sincere. You’re selling, but you don’t want them to feel like they’re being sold a used car.

2) Get To The Point
You may have 10 great ideas that you’d like to tell the seller. They will only remember two. The seller may have 10 other letters to read. If you mix in your best points with your lesser points, they may all just become a jumble.

Pick two or three reasons why you will be the best buyer for this home, and make them distinctly recognizable. The more streamlined you make your message, the more memorable it will be.

3) Paint A Picture
People remember what they’ve read at a far higher rate when they can see a picture of it in their head. “I really love this neighborhood because I’ve lived here and gone to school here,” doesn’t resonate.

On the other hand, “I spend half of my time walking the cobblestone streets around this block, dropping my daughter off at Gilman School and volunteering at Schnitzelfest every summer,” will trigger a visual memory for a seller. Think “I’d be so happy in the summer to be cooking Neapolitan pizza for friends and neighbors in your outdoor wood-fired oven”.

4) Don’t Remodel The House
Planning on adding a second story or changing the landscaping? Don’t mention it. You might be correct that the seller’s sewing room would make a great workout room for you, but this isn’t the time.

If you’re going to expand to create more bedrooms, you might be changing the seller’s favorite eyebrow windows in the roofline. They may have buried their dog under the tree you’re planning to pave over. he sellers may have awful taste, but homeowners are very protective of their homes.

5) Show Stability
Present yourself as a stable buyer who will have no problem closing the purchase. Whether that is a reference to your lack of contingencies, stellar employment record, or commitment to moving in as soon as the sellers are comfortable, ease the sellers’ fears of a shaky transaction.

6) Show Humility
At the same time, be humble and ask for the sellers’ blessing on your offer. “We would be so honored to live in your home,” goes much further than “We are confident that you will accept our generous offer.” The ball is in their court, and your letter should acknowledge that.

7) Don’t Whine
The emotion of your letter must be upbeat and high. It needs to make the seller feel good. Everyone wants to play with a winner.

The seller doesn’t care how many other homes you’ve lost out on. They don’t care that your rent just doubled. They don’t want to know about your wife’s sad condition that requires you to have a home like this. They just feel uncomfortable now. In fact, they’re already tossing your offer in the round file as they finish this paragraph.

8) Close With Clarity
Remember the five-point paragraphs and five-paragraph themes you had to write in school? While those formulas are too long and rigid for this letter, their closing advice should be noted. Your excitement, motivation, and ability should be reiterated at the end of your letter in a quick recap.

Remember that the sellers could be reading a few letters. Make sure that the closing of your letter reminds them of your best qualities and reinforces them.

9) Sign with Appreciation
The feeling your sellers will leave with can live or die on the signature line: “Sincerely”, “Cordially”, “Best Regards”, and “Yours Truly” do not apply. This is not a business correspondence of equals. Thank the sellers for spending their valuable evening reading the ode that you wrote about your unworthy self.

“Thank you so much for your time,” “Thank you for the opportunity,” “Your consideration is greatly appreciated,” or even “We are honored to have the opportunity,” will leave the seller understanding that you value their time and are grateful for it.

10) Spell Check. Grammar Check. Buddy Check. Do It Again.
As the recovering son of a former Catholic school English teacher, there is a dark secret I’d like to let you in on. We’re prejudiced. We look down on people who aren’t like us. There is a heinous belief ingrained in us from birth that says people who misspell and use incorrect grammar are lesser beings and not worthy of our respect.

Truthfully, though, there is an unbelievable amount of weight that some sellers will put on the preciseness of the letter. Right or wrong, the buyer’s personality will be judged from their attention to detail, ability to follow-through, and level of care in the letter. Buyer reliability is often gleaned from how well the rules of grammar are followed. If grammar isn’t your thing, find someone whose thing it is. You never know: the house you want to buy just might belong to my mother.

Write The Letter, Check It Twice, and Send It Off
There are many tactics being used by home buyers to stand out from the crowd. While not all sellers will read them, personalized letters are the most-accepted and popular form of unique buyer strategies available. Don’t rush the letter. Take the time to write it correctly. It just might be the most valuable single page of text you ever write.

The nation’s economic outlook has vastly improved in recent weeks with signs of stronger job growth, bigger gains in personal incomes and an improving housing market.

By Don Lee and Shan Li

WASHINGTON — After six years of a gloomy recession and shaky recovery, the U.S. economy looks poised to regain its glow next year with stronger job growth, bigger income gains for more people and a resurgence of homeowners moving up into new digs.

The overall economic outlook for the U.S. has improved sharply in recent weeks amid a string of surprisingly robust economic data: Businesses have stepped up hiring, new factory orders from abroad are at a two-year high and consumers have been flocking to car lots and restaurants.

State and local governments that not long ago were in massive retrenchment are spending more too.

“We could see the unemployment rate down to 6% this time next year,” said Robert Kleinhenz, chief economist for the Los Angeles County Economic Development Corp.

That would be a full percentage point below the current rate and, in some analysts’ views, close to full employment.

Some experts say economic growth could be even stronger next year now that the House has approved the bipartisan two-year budget deal.

Not only would the agreement undo most of the sequestration spending cuts in the short term, it would lower a major confidence hurdle for businesses, some of which complained that they have been hamstrung by the federal government’s repeated budget standoffs and partisan warring.

“If that is dealt with, that goes a long way toward reducing uncertainty,” said David Hannah, chief executive of Reliance Steel & Aluminum Co. in Los Angeles.

Even before the budget deal, Hannah was preparing for a marked step-up in business next year — and more aggressive hiring to add to his company’s worldwide workforce of about 14,000.

Hannah said Reliance’s orders accelerated in the second half of this year, which usually happens in the first half. He said the company got a good boost from the buoyant auto industry as well as its other mainline customers: aircraft makers, oil and gas firms and electronics companies.

Reliance’s biggest source of revenue, nonresidential construction, has been lagging since the recession, but Hannah sees more demand next year as increased home-building creates the need for more supermarkets, doctors’ offices and other commercial and industrial development.

“We are looking for 2014 to be a better year overall in both sales and profits than 2013,” he said.

All in all, many economists now see economic growth climbing to a solid 3% next year, a significant improvement from the 2% average annual pace that the economy has been stuck on for the last 4 1/2 years.

An acceleration to 3% would probably push up U.S. job growth to 250,000 a month on average, from a monthly average of 190,000 over the last 12 months, Kleinhenz said.

At that pace, the nation would recover all the jobs lost in the recession by the end of 2014. And it would push down the jobless rate closer to the 5.5% to 6% range that some now see as the potential long-term unemployment rate.

Global competition and the increasing role played by computers and other advanced technologies have reduced the need for mid-level workers with no special skills, which has forced some economists to rethink their old assumption that full employment meant no more than 4% or 5% joblessness.

Many business executives and analysts remain cautious about the outlook.

One reason is that around this time each of the last four years, many top economists, including those at the Federal Reserve, put out rosy forecasts that the recovery would shift into higher gear.

But no sustained pickup ever materialized as still shell-shocked consumers sat on their hands and businesses on their piles of unspent cash. A host of political problems at home and shocks from the Arab world, the Eurozone and Asia took turns knocking down growth.

Although the external and internal conditions look better — Europe is recovering and U.S. debt burdens are lighter — there are new risks on the horizon.

Perhaps the biggest is that interest rates have risen since summer and are likely to tick higher as the Federal Reserve begins to pull back on its $85 billion in monthly bond purchases, a key stimulus aimed at spurring the economic recovery.

It’s uncertain how investors and financial markets will react as the central bank, with Janet L. Yellen set to be its new chair, tries to wean the economy from years of easy-money policies.

“That’s the one critical thing that may potentially lead to some slowing,” said Timothy Gill, deputy chief economist at the National Electrical Manufacturers Assn.

The Fed’s bond-buying and other stimulus efforts have helped drive stock prices to record highs, which in turn power more investments and spending, especially among the richest Americans.

Fed reports show that in the third quarter, U.S. households as a whole had recouped nearly all of the wealth lost during the Great Recession, although that can’t be said of the average household.

Analysts doubt such hefty stock appreciation will continue next year. Wealth is more likely to be generated by home equity gains and thus spread proportionately a little more to middle-class Americans.

The coming year also could mark a new stage in the housing market’s recovery: “2013 was the year of the investor,” said Jed Kolko, chief economist at the real estate website Trulia, “but 2014 will be the year of the repeat home buyer.”

That would signal a return to a healthier housing market, fueled in significant part by existing owners who finally have regained enough home equity to seek bigger, better quarters.

“Rising prices and a reduction in negative equity are bringing willing sellers back to the market,” said Paul Diggle, an analyst at Capital Economics.

With more supply coming on line — plus higher mortgage rates and fewer investor purchases — house price appreciation is likely to slow to 4% next year from a projected 11% this year, he said.

Still, stronger home building will continue to juice the economic recovery. Increased exports and business investments will help too. And unlike the last two years, the government sector isn’t likely to be a big drag on growth.

That leaves consumer spending, the single biggest component of the U.S. economy, accounting for about 70% of gross domestic product, or the nation’s total economic output.

Despite the strong rebound in car sales, personal spending on the whole has been mediocre, growing at an annual rate of about 2% in the last three years. But some analysts say next year could be a breakout year for the U.S. consumer.

On one side, households are in better shape to spend. Many have paid down their credit card and other debts over the last few years; their average debt-servicing burden is now as low as it has been in a generation.

Layoffs have fallen to pre-recession levels, and many companies are operating with bare-bone staffs. As sales grow, it won’t be just head counts that rise, said Shawn DuBravac, chief economist for the Consumer Electronics Assn. Employers also will pay more to retain their most productive and profitable workers, he said.